Debt Recovery Tribunal (DRT) | Best Lawyer for DRT

Debt Recovery Tribunal (DRT) | Best Lawyer for DRT

Introduction to Debt Recovery Tribunals (DRT)

Banking institutions and financial organizations often face challenges in recovery of loans advanced by them to specific individuals or company entities. Due to this, the banks and monetary organizations are restraining on their own from advancing out loans. There was a requirement to obtain a system that is efficient recuperate the mortgage from borrowers. This resulted in the creation of Debt Recovery Tribunals (DRTs) after the passage of Recovery of Debts because of Banking institutions and Financial Institutions Act (RDDBFI), 1993. DRTs handle the full situations in regard to disputed loans above Rs. 10 lakhs. Debt Recovery Appellate Tribunals (DRATs) handles the appeals arising out of the orders of DRTs. Currently, there are 33 DRTs and 5 DRATs employed in India in order for recovery of loan from borrowers, the banks and financial institutions had to register a suit in the civil courts. The suit was decided and tried as per the provisions of Civil Procedure Code (CPC), 1908 which would be long and complex.

The Birth of DRTs and Their Role in Loan Recovery

A committee ended up being formed in 1981 to recommend reforms under the Chairmanship of Mr. T. Tiwari. It absolutely was observed by the committee that considering that the court was strained with way too many cases, importance was not directed at instances in respect to the recovery of dues of banks and monetary organizations. The committee advised measures which are different amongst which was developing quasi-judicial figures that will deal just with recovery issues. However, establishing of these systems wasn’t initiated for around ten years later on around Indian monetary market and liberalization that is economic. The aim that is first role of DRT is that the data recovery of loan from borrowers which will be because of finance institutions and banks. These tribunals were designed to expedite the process of loan recovery and reduce the burden on the traditional court system.

The Power and Functioning of DRTs

The Tribunal is empowered to try and settle cases recuperation of advances from NPAs as previously mentioned by the banks beneath the RBI recommendations. The Tribunal has all the powers vested aided by the District Court. The Tribunal additionally features a Recovery officer whom assists in executing the recovery Certificates as passed away by the Presiding Officers. DRT followed the proficient appropriate procedure by emphasizing on speedy disposal of this situations and fast implementation of the order that is final. A suit may be designed to DRT either through direct application or through SARFAESI route.

The Legal Paradox: Balancing Protection and Discrimination

The legislature has established specialized courts to balance the rights of creditors and borrowers, called as Debt Recovery Tribunals using the goal of providing financial bodies with a speedier and more adept technique of recovery of debts. Debt Recovery Appellate Tribunals are founded to take into account the appeal up against the decision of DRT. These Tribunals have added to lessening the duty on civil courts.

The Role of Education and Awareness in Debt Recovery

The world of finance can be complex, with various laws and regulations governing it. Understanding the intricacies of debt recovery laws and processes can help individuals and institutions make informed decisions. One such area of financial law is Debt Recovery Tribunals (DRT), which were set up to help banks and financial institutions recover bad loans. DRT is a quasi-judicial body that has been set up to facilitate the speedy recovery of debts from defaulting borrowers. The government established DRTs under the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI), 1993. The main objective of the act is to provide for the expeditious adjudication and recovery of debts due to banks and financial institutions.

The SARFAESI Act and Its Role in Debt Recovery

One of the most common ways in which banks recover bad loans is through the SARFAESI Act, which stands for The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act. The SARFAESI Act allows banks and other financial institutions to auction residential or commercial properties to recover loans. The act was introduced in India in 2002 to help banks and financial institutions recover loans from defaulters by enabling them to enforce security interest without the intervention of the court. The SARFAESI Act empowers banks to take possession of the assets offered as security and sell them to recover the loan amount. It also enables banks to issue notices to the borrowers demanding payment of the loan, and seize and sell the assets without the need to obtain court permission.

The Debt Recovery Appellate Tribunal (DRAT) and Its Function

However, the process of debt recovery is not always straightforward, and in some cases, the defaulter may not agree to repay the debt. This is where DRT comes into play. If a bank or financial institution is unable to recover its debt, it can approach the DRT to recover the amount. The DRT will then issue a recovery certificate, which is a legally binding order to recover the debt. The process of debt recovery can be complex, and there are instances where decisions of the DRT are contested before the Debt Recovery Appellate Tribunal (DRAT) for relief.

The Importance of Legal Assistance in Debt Recovery Cases

Navigating the process of debt recovery can be complex and time-consuming, making it crucial to have competent legal assistance and it is important to have a good lawyer on your side who can guide you through the legal process.

Century Law Firm: Your Trusted Lawyers for DRT and DRAT Cases

Century Law Firm, based in Delhi, is a leading law firm specializing in DRT and DRAT cases. The firm has a team of experienced lawyers who are well-versed in the legal provisions related to debt recovery. The lawyers at Century Law Firm understand the complexities of DRT and SARFAESI Act cases and have a successful track record in recovering bad loans for their clients.

At Century Law Firm, the lawyers take a client-centric approach to each case, providing personalized solutions to suit the client’s specific requirements. The lawyers ensure that the clients are fully aware of their legal rights and obligations and are kept up-to-date with the latest developments in their case. The firm’s lawyers have a deep understanding of the DRT and SARFAESI Act, which enables them to provide their clients with the best legal representation and advice.

The Debt Recovery Tribunal (DRT) is a specialized court that deals with cases related to the recovery of loans and debts. It was established in 1993 under the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI Act), 1993. The main objective of the DRT is to provide an expeditious and efficient mechanism for the recovery of bad debts.

When a borrower fails to repay a loan, the lender can initiate legal proceedings against the borrower to recover the debt. Under the RDDBFI Act, the lender can file a case with the DRT for the recovery of the debt. The DRT has the power to issue recovery certificates and attach the property of the borrower to recover the debt. The borrower can also file a counterclaim with the DRT if they have any objections to the claim of the lender.

Bank loans are a common form of financing in India, and they are offered by various public and private sector banks. The State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, and Punjab National Bank are some of the major banks in India that offer various types of loans such as home loans, car loans, personal loans, education loans, and business loans.

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, is an important law that governs the recovery of loans in India. The SARFAESI Act provides a framework for the recovery of bad debts by banks and financial institutions. It allows banks to take possession of the security provided by the borrower and sell it to recover the debt.

The SARFAESI Act also provides for the creation of asset reconstruction companies (ARCs) that can purchase non-performing assets (NPAs) from banks and financial institutions. The ARCs can then take steps to recover the debt from the borrower or restructure the debt and sell it to investors.

Century Law Firm is one of the best law firms in Delhi that specializes in DRT and DRAT cases. The firm has a team of experienced and skilled lawyers who have a deep understanding of the legal and regulatory framework governing the recovery of bad debts in India.

The lawyers at Century Law Firm have represented various clients in DRT and DRAT cases, and they have a track record of success in recovering bad debts. They have a deep understanding of the SARFAESI Act, the RDDBFI Act, and other laws and regulations that govern the recovery of bad debts in India.

Century Law Firm provides end-to-end legal solutions for DRT and DRAT cases, including legal advice, drafting of legal documents, representation in court, and enforcement of recovery certificates. The firm has a strong network of professionals, including chartered accountants and valuers, who can provide valuable inputs in DRT and DRAT cases.

Borrowers who have taken loans from banks or financial institutions are often in a vulnerable position when they are faced with a default or non-payment situation. The lender can take various steps to recover the dues, such as filing a case in the DRT or invoking the provisions of the SARFAESI Act, which gives the lender the power to take over and sell the borrower’s secured assets. This can be a traumatic experience for borrowers who may not know their legal rights or the options available to them.

This is where the services of a good DRT lawyer come into play. A DRT lawyer can represent the borrower in proceedings before the DRT and protect their interests. The lawyer can challenge the lender’s claim, raise defenses, and also explore settlement options. A good DRT lawyer can help the borrower understand the legal process and provide guidance on the best way to approach the case.

Century Law Firm is a leading law firm in Delhi that represents borrowers in DRT cases. The firm has a team of experienced lawyers who are well-versed in the legal and procedural aspects of DRT cases. The firm understands the challenges that borrowers face and provides effective legal representation to protect their interests.

The firm’s lawyers have extensive experience in handling DRT cases and have successfully represented several clients in such matters. The firm has a reputation for providing high-quality legal services and is committed to ensuring that the borrower’s rights are protected.

Century Law Firm: Expertise in SARFAESI Act Cases

In addition to DRT cases, Century Law Firm also handles cases under the SARFAESI Act. Our team of experienced lawyers is well-versed in the intricacies of the SARFAESI Act and can provide comprehensive legal support. The SARFAESI Act provides for the recovery of secured loans by the lender without the intervention of a court. The Act empowers the lender to take possession of the secured assets and sell them without the borrower’s consent. However, the borrower has certain legal rights under the Act and can challenge the lender’s actions.

Century Law Firm’s lawyers are well-versed in the provisions of the SARFAESI Act and can provide effective legal representation to borrowers. The firm’s lawyers can challenge the lender’s actions, raise defenses, and also explore settlement options. The firm has successfully represented several borrowers in SARFAESI cases and is committed to protecting their legal rights.

In addition to DRT and SARFAESI cases, Century Law Firm also handles cases before the DRAT. The DRAT is the appellate forum for appeals against orders passed by the DRT. The firm’s lawyers have extensive experience in handling DRAT cases and can provide effective legal representation to borrowers.

In conclusion, if you are a borrower facing a default or non-payment situation, it is important to seek the services of a good lawyer. Century Law Firm is a leading law firm in Delhi that represents borrowers in DRT, SARFAESI, and DRAT cases. The firm has a team of experienced lawyers who are well-versed in the legal and procedural aspects of such cases. The firm is committed to protecting the borrower’s legal rights and providing effective legal representation to ensure a favorable outcome.

Conclusion: The Importance of Legal Representation in Debt Recovery Cases

In conclusion, navigating DRT and SARFAESI Act cases can be complex, underscoring the importance of experienced legal representation. Century Law Firm is one of the best law firms in Delhi for DRT and DRAT cases, with a team of experienced lawyers who have a successful track record in recovering bad loans for their clients. The lawyers at Century Law Firm provide personalized solutions to suit the client’s specific requirements and ensure that their clients are fully aware of their legal rights and obligations. If you have any queries related to debt recovery, it is advisable to consult with a lawyer at Century Law Firm.

Comprehensive FAQs on Debt Recovery Tribunals (DRT)

What is a Debt Recovery Tribunal (DRT)?

A Debt Recovery Tribunal (DRT) is a quasi-judicial body established under the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI), 1993. DRTs are specialized courts designed to provide an expeditious and efficient mechanism for banks and financial institutions to recover debts from defaulting borrowers. These tribunals handle cases related to disputed loans above Rs. 10 lakhs and have all the powers vested in a District Court.

When was the DRT system established in India?

The DRT system was established in India in 1993 following the enactment of the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI), 1993. The concept was recommended by a committee formed in 1981 under the Chairmanship of Mr. T. Tiwari, but the actual implementation took place during the period of economic liberalization in the early 1990s.

What is the minimum amount threshold for DRT cases?

DRT has jurisdiction over cases involving debts of Rs. 20 lakhs and above. Cases involving amounts below this threshold are handled by regular civil courts. This threshold ensures that DRTs focus on significant debt recovery matters that have substantial impact on banking institutions.

How many DRTs and DRATs are currently operational in India?

Currently, there are 33 Debt Recovery Tribunals (DRTs) and 5 Debt Recovery Appellate Tribunals (DRATs) operational across India. These tribunals are strategically located to ensure adequate coverage for debt recovery proceedings throughout the country.

What is the difference between DRT and DRAT?

DRT (Debt Recovery Tribunal): This is the primary tribunal that handles original applications for debt recovery from borrowers. It has the power to issue recovery certificates and attach properties for debt recovery.

DRAT (Debt Recovery Appellate Tribunal): This is the appellate forum that hears appeals against orders passed by DRTs. If a party is dissatisfied with a DRT’s decision, they can approach the DRAT for relief.

What powers does a DRT have?

A DRT has extensive powers including:

  • All powers vested in a District Court
  • Power to try and settle cases for recovery of advances from NPAs
  • Authority to issue recovery certificates
  • Power to attach and sell properties of defaulting borrowers
  • Jurisdiction to hear counterclaims filed by borrowers
  • Authority to summon witnesses and examine evidence

Who can file a case in DRT?

The following entities can file cases in DRT:

  • Banks (both public and private sector)
  • Financial institutions
  • Non-Banking Financial Companies (NBFCs)
  • Asset Reconstruction Companies (ARCs)
  • Any entity that has advanced loans and is seeking recovery of debts above Rs. 10 lakhs

What is the role of a Recovery Officer in DRT proceedings?

A Recovery Officer is an important functionary attached to each DRT who assists in executing recovery certificates issued by the Presiding Officer. The Recovery Officer is responsible for:

  • Implementing the final orders of the DRT
  • Attaching and selling properties as directed
  • Collecting the recovered amounts
  • Ensuring compliance with the tribunal’s directives

Can a case be filed in DRT through the SARFAESI route?

Yes, a case can be filed in DRT either through direct application or through the SARFAESI route. Under the SARFAESI Act, 2002, if a borrower challenges the bank’s action of taking possession of secured assets, the matter can come before the DRT for adjudication.

What is the SARFAESI Act and how does it relate to DRT?

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, allows banks and financial institutions to recover loans by taking possession of secured assets without court intervention. However, if borrowers challenge the bank’s actions under SARFAESI, these disputes can be adjudicated by DRTs.

What documents are required to file a case in DRT?

Essential documents for filing a DRT case include:

  • Original loan agreement and related documents
  • Security documents (mortgage deeds, hypothecation agreements)
  • Demand notices served to the borrower
  • Account statements showing outstanding dues
  • Board resolution authorizing the filing of the case
  • Valuation reports of secured assets
  • Proof of service of statutory notices

What is the procedure for filing a case in DRT?

The procedure involves:

  1. Filing an Original Application (OA) with requisite court fees
  2. Submission of all relevant documents and evidence
  3. Serving notice to the respondent (borrower)
  4. Attending hearings as scheduled by the tribunal
  5. Presenting arguments and evidence
  6. Obtaining the final order or recovery certificate

Can a borrower file a counterclaim in DRT?

Yes, borrowers can file counterclaims in DRT if they have valid objections to the lender’s claim. Counterclaims may include disputes regarding:

  • Calculation of outstanding amounts
  • Interest rates charged
  • Wrongful debiting of accounts
  • Violation of loan terms by the lender
  • Claims for damages due to wrongful actions

What is a Recovery Certificate?

A Recovery Certificate is a legally binding document issued by the DRT after determining that a debt is due and payable. It serves as an execution decree and empowers the Recovery Officer to:

  • Attach and sell the borrower’s properties
  • Recover the decreed amount
  • Take other coercive measures for debt recovery

How long does a DRT case typically take?

While DRTs were established to expedite debt recovery, the actual time depends on various factors:

  • Complexity of the case
  • Cooperation of parties involved
  • Availability of documents and evidence
  • Court’s workload Generally, cases can take anywhere from 6 months to 2-3 years for final disposal.

Can DRT proceedings be challenged?

Yes, DRT proceedings can be challenged through:

What is the limitation period for filing a case in DRT?

The limitation period for filing a debt recovery case in DRT is typically 3 years from the date when the cause of action arose (usually from the date of default). However, this may vary based on specific circumstances and the nature of the debt.

Can settlement be reached during DRT proceedings?

Yes, parties can reach an amicable settlement at any stage of DRT proceedings. The tribunal encourages settlements as they:

  • Save time and costs for both parties
  • Reduce the burden on the judicial system
  • Provide mutually acceptable solutions
  • Allow for restructuring of debts

What happens if a borrower doesn’t appear in DRT proceedings?

If a borrower fails to appear despite proper service of notice, the DRT can:

  • Proceed ex-parte against the borrower
  • Issue a recovery certificate based on the bank’s evidence
  • Direct attachment and sale of the borrower’s properties
  • Pass orders in the absence of the borrower

Are there any fees for filing cases in DRT?

Yes, there are prescribed court fees for filing cases in DRT, which vary based on:

  • The amount of debt claimed
  • Type of application (original application, appeal, etc.)
  • Additional prayers sought The fees are generally a percentage of the claimed amount, subject to minimum and maximum limits.

You can calculate the fees required through our court fees calculator.

Can immovable property be attached by DRT?

Yes, DRT has the power to attach both movable and immovable properties of the borrower for debt recovery. This includes:

  • Residential and commercial properties
  • Land and buildings
  • Bank accounts and deposits
  • Shares and securities
  • Business assets and inventory

What is the role of Asset Reconstruction Companies (ARCs) in DRT cases?

Asset Reconstruction Companies (ARCs) can:

  • Purchase non-performing assets (NPAs) from banks
  • File cases in DRT for recovery of purchased debts
  • Restructure debts and sell them to investors
  • Take over secured assets and manage them for recovery

Can a guarantor be proceeded against in DRT?

Yes, guarantors can be proceeded against in DRT cases as they are liable for the borrower’s debt. Banks can:

  • Include guarantors as respondents in the original application
  • Seek recovery from guarantors’ assets
  • Obtain orders against both primary borrowers and guarantors

What is the difference between civil court proceedings and DRT proceedings?

Civil Court Proceedings:

  • Follow the Civil Procedure Code, 1908
  • Time-consuming and complex procedures
  • General jurisdiction over all civil matters
  • No specialized knowledge of banking laws

DRT Proceedings:

  • Follow streamlined procedures under RDDBFI Act
  • Expeditious disposal of cases
  • Specialized jurisdiction for debt recovery
  • Expertise in banking and financial laws

Can a borrower approach DRT for relief?

While DRT is primarily meant for creditors to recover debts, borrowers can:

  • File counterclaims challenging the bank’s claim
  • Seek relief from wrongful actions by banks
  • Request time for repayment through settlement
  • Challenge the calculation of outstanding amounts

What is the effect of insolvency proceedings on DRT cases?

If insolvency proceedings are initiated under the Insolvency and Bankruptcy Code, 2016:

  • DRT proceedings may be stayed or suspended
  • The matter comes under the jurisdiction of the National Company Law Tribunal (NCLT)
  • Creditors must file their claims before the Resolution Professional
  • DRT proceedings can resume if insolvency proceedings are withdrawn

Can foreign banks file cases in DRT?

Yes, foreign banks operating in India can file cases in DRT for recovery of debts, provided:

  • They have proper authorization to operate in India
  • The debt amount exceeds Rs. 20 lakhs
  • The loan was advanced within Indian jurisdiction
  • They comply with RBI regulations

What is the role of valuers in DRT proceedings?

Valuers play a crucial role in:

  • Determining the market value of secured assets
  • Providing independent valuation reports
  • Assisting in the auction process
  • Ensuring fair value realization during asset sales

Can DRT order for attachment before judgment?

Yes, DRT can order attachment before judgment if:

  • There’s a prima facie case for debt recovery
  • The borrower is likely to dispose of assets
  • There’s a risk of defeating the bank’s claim
  • Proper security is provided by the applicant bank

What happens to joint borrowers in DRT proceedings?

In cases of joint borrowers:

  • All joint borrowers are typically made respondents
  • Each borrower is jointly and severally liable
  • Recovery can be made from any or all borrowers
  • Assets of all joint borrowers can be attached

Can a DRT case be transferred to another DRT?

Yes, a DRT case can be transferred to another DRT on grounds such as:

  • Convenience of parties
  • Better administration of justice
  • Location of assets
  • Availability of witnesses The transfer requires proper application and court approval.

What is the procedure for appeal in DRAT?

The appeal procedure in DRAT involves:

  • Filing appeal within 45 days of DRT order
  • Payment of prescribed appeal fees
  • Depositing 50% of the decreed amount (unless waived)
  • Serving notice to respondents
  • Attending hearings and presenting arguments

Can compound interest be claimed in DRT?

Banks can claim compound interest in DRT cases if:

  • The loan agreement provides for compound interest
  • The charging of compound interest is legally valid
  • Proper notice was given to the borrower
  • The calculation is transparent and verifiable

What is the significance of demand notice in DRT cases?

Demand notice is crucial as it:

  • Serves as formal notice to the borrower
  • Starts the recovery process
  • Establishes the cause of action
  • Provides opportunity for voluntary repayment
  • Is mandatory before initiating legal proceedings

Can a borrower seek stay of DRT proceedings?

A borrower can seek stay of DRT proceedings by:

  • Filing an application before the DRT itself
  • Approaching the DRAT in appeal
  • Moving the High Court in exceptional circumstances
  • Showing valid grounds for stay such as pending settlement negotiations

What is the role of advocates in DRT proceedings?

Advocates play a vital role in:

  • Representing clients before DRT
  • Drafting legal documents and applications
  • Presenting arguments and evidence
  • Advising on legal strategies
  • Facilitating settlements between parties

How are DRT orders enforced?

DRT orders are enforced through:

  • Recovery Officers who execute the orders
  • Attachment of borrower’s properties
  • Public auction of attached assets
  • Direct recovery from borrower’s bank accounts
  • Coercive measures as per the tribunal’s directions

Can a company in liquidation be proceeded against in DRT?

If a company is under liquidation:

  • DRT proceedings may be stayed
  • Claims must be filed before the liquidator
  • Recovery is subject to liquidation proceedings
  • DRT cannot interfere with the liquidation process

What is the difference between secured and unsecured debts in DRT?

Secured Debts:

  • Backed by collateral or security
  • Easier to recover through asset realization
  • Priority in recovery proceedings
  • Can invoke SARFAESI provisions

Unsecured Debts:

  • Not backed by specific security
  • Recovery depends on borrower’s other assets
  • Lower priority in insolvency proceedings
  • Limited enforcement options

Can DRT proceedings be conducted online?

With technological advancement, many DRTs have adopted:

  • E-filing of applications and documents
  • Video conferencing for hearings
  • Digital case management systems
  • Online payment of court fees However, the extent of online proceedings varies across different DRTs.

What is the role of RBI in DRT matters?

The Reserve Bank of India (RBI):

  • Issues guidelines for NPA classification
  • Regulates banking operations affecting DRT cases
  • Provides policy framework for debt recovery
  • Issues circulars on SARFAESI implementation
  • Supervises banking institutions filing DRT cases

Can agricultural loans be recovered through DRT?

Agricultural loans can be recovered through DRT if:

  • The loan amount exceeds Rs. 20 lakhs
  • No specific state legislation prohibits such recovery
  • The borrower is not a small/marginal farmer (subject to policy)
  • Proper procedures are followed as per agricultural debt laws

What is the effect of One Time Settlement (OTS) on DRT proceedings?

If an OTS is reached:

  • DRT proceedings can be withdrawn
  • Terms of settlement become binding
  • Default in OTS can revive original proceedings
  • Fresh legal action may be initiated for OTS default

Can interest on interest be claimed in DRT?

Interest on interest (compound interest) can be claimed if:

  • The loan agreement specifically provides for it
  • It’s not prohibited by any law or regulation
  • Proper calculations are provided
  • The borrower was given adequate notice

What is the procedure for auction of attached property?

The auction procedure involves:

  • Public notice of auction
  • Fixing reserve price (usually 75% of market value)
  • Conducting public auction
  • Issuing sale certificate to highest bidder
  • Depositing sale proceeds in court
  • Distribution as per tribunal’s directions

Can a borrower redeem attached property before auction?

Yes, a borrower can redeem attached property by:

  • Paying the entire decreed amount with interest
  • Depositing the amount in the tribunal
  • Seeking permission from the tribunal
  • Complying with all conditions set by the court

What is the limitation for execution of DRT orders?

DRT orders can generally be executed within:

  • 12 years from the date of the order
  • Extension possible on sufficient cause
  • Fresh execution application required after limitation
  • Subject to provisions of the Limitation Act

Can foreign nationals be proceeded against in DRT?

Foreign nationals can be proceeded against in DRT if:

  • They have taken loans from Indian banks/financial institutions
  • They have assets in India
  • The debt amount exceeds Rs. 10 lakhs
  • Proper service of notice is possible

What is the role of chartered accountants in DRT cases?

Chartered Accountants assist in:

  • Calculating outstanding dues
  • Preparing financial statements
  • Auditing loan accounts
  • Providing expert testimony
  • Valuing business assets

Can DRT pass orders for specific performance?

DRT primarily deals with money recovery and generally does not pass orders for specific performance. However, it can:

  • Direct compliance with loan agreement terms
  • Order handover of secured assets
  • Pass necessary directions for debt recovery

What happens if the borrower becomes insolvent during DRT proceedings?

If insolvency is declared:

  • DRT proceedings are automatically stayed
  • Claims must be filed in insolvency proceedings
  • Moratorium applies to all recovery actions
  • DRT cannot proceed until insolvency is resolved

Can multiple banks file a joint application in DRT?

Yes, multiple banks can file joint applications in cases of:

  • Consortium lending
  • Multiple banking arrangements
  • Joint financing of projects
  • Common security arrangements

What is the procedure for withdrawal of DRT cases?

DRT cases can be withdrawn by:

  • Filing a withdrawal application
  • Obtaining borrower’s consent (if required)
  • Paying prescribed court fees
  • Getting tribunal’s permission
  • Complying with any conditions imposed

How are costs determined in DRT proceedings?

Costs in DRT proceedings include:

  • Court fees for filing applications
  • Advocate fees
  • Valuation charges
  • Service charges
  • Other incidental expenses Usually, the losing party bears the costs.

Can a borrower file a criminal complaint against recovery actions?

Borrowers can file criminal complaints if:

  • There’s criminal intimidation or coercion
  • Recovery agents exceed legal limits
  • There’s breach of peace during recovery
  • Illegal means are used for recovery However, bona fide recovery actions are protected under law.

What is the significance of possession notice under SARFAESI?

Possession notice under SARFAESI:

  • Formally takes possession of secured assets
  • Transfers custody to the bank
  • Allows banks to manage and sell assets
  • Can be challenged in DRT within 60 days

Can DRT proceedings affect credit score?

DRT proceedings can affect credit scores as:

  • Cases are reported to credit bureaus
  • Default classification impacts credit rating
  • Recovery proceedings are recorded
  • Settlement terms may affect future credit

What is the role of court commissioners in DRT?

Court commissioners in DRT:

  • Conduct local investigations
  • Value properties and assets
  • Serve notices and summons
  • Facilitate execution of orders
  • Report to the tribunal on ground realities

Can a borrower seek anticipatory bail in DRT-related matters?

While DRT proceedings are civil in nature, if related criminal cases are filed, borrowers can seek anticipatory bail from appropriate criminal courts. DRT itself doesn’t deal with criminal matters or bail applications.

How are disputed claims handled in DRT?

Disputed claims in DRT are handled through:

  • Detailed examination of evidence
  • Expert testimony if required
  • Legal arguments from both sides
  • Reasoned orders based on evidence

What is the effect of settlement on guarantors?

Settlement between bank and borrower:

  • May or may not discharge guarantors
  • Depends on terms of guarantee
  • Express release required for guarantor discharge
  • Guarantors may remain liable unless specifically released